Drugs companies may be proving the darkest conspiracy theorists right

Outlook

Critics of drug groups like to portray them as vile corporate villains, profiteering from life-saving treatments at the expense of the sick and the dying. Pfizer will have played right into that narrative if the accusation that it has taken millions out of the NHS, in cahoots with the rather less well known Flynn Pharma, is to be believed.

The story goes like this. In 2012 Pfizer sold the distribution rights to an epilepsy treatment called Epanutin to Flynn, which took off the brand name and started selling it on to the NHS. Prior to this, the NHS had spent £2.3m annually on the pills. After Flynn got involved, the bill ballooned to £50m in 2013 and then £40m last year.

Excessive and unfair, says the Competition and Markets Authority, which accuses both companies of abusing dominant market positions, with Pfizer overcharging Flynn and then Flynn compounding the grievous financial injury done to the UK’s health service.

This is only a provisional finding by the watchdog and both have the right to respond. The word is that Pfizer may say it was making a loss on the treatment, and that had the price not been hiked, it may have been withdrawn – leaving the NHS with no option but to switch to even pricier drugs. But even if the treatment were loss- making, or only marginally profitable, it’s rather hard to see how that would justify such a dramatic price rise.

Small wonder then that the CMA is making what, for it, are bellicose noises.

I’m generally not as quick to criticise pharma companies as some. It is a fact that developing new drugs is both risky and expensive. It requires capital, and capital will only go where it can make a return. New drugs bear not only the costs of their own development, manufacture and marketing, but also those of multiple failed experiments. Prices are further influenced by the time limitations of pharma companies’ patents.

But if the CMA is even half right on Pfizer and Flynn, they will have confirmed the darkest thoughts of the industry’s sizeable corps of doubters.

The CMA has the power to impose penalties of up to 10 per cent of global turnover (Pfizer’s topped $50bn last year) – and if its objections prove justified, it should be bold and use that power.

With the NHS creaking under the strain of an ageing population, there can only be zero tolerance of behaviour like this.